The National Savings Organisation established the Public Provident Fund (PPF) Scheme in 1968 to encourage small-scale savings and investing. The PPF program is popular among risk-averse investors because it is unaffected by market volatility and provides consistent and guaranteed returns. Furthermore, the plan enables you to claim income tax advantages on capital investments under Section 80C of the Income Tax Act of 1961.
In this post, we will examine the procedure of creating a PPF account in all banks.
PPF Account Opening Process
Eligibility Criteria
- Only an Indian person can open a PPF account.
- One person can create only one Public Provident Fund account.
- Minors who have legal age proof can open an account.
- NRIs who held a PPF account while living in India can close it after 15 years, with no opportunity to extend.
- Hindu Undivided Families (HUFs) can’t create an account after May 13, 2005.
Further, you must make a minimum deposit of Rupees 500 per financial year to create the PPF account as well as keep the account active. The maximum deposit allowed per financial year is Rupees 1.5 lakh.
Important Documents Required for PPF
> Following any ID proof:
- Aadhar Card
- PAN Card
- Passport
- Voter ID Card
- Driving Licence
> Address proof:
- Aadhar Card
- Ration Card
- Utility bills
- Voter Card
- Passport
> PPF account opening form.
> Two passport-size photos.
> A signed cheque in favor of your PPF account.
> A birth certificate may also be required for Minors.
Please keep in mind that all documents must be self-attested and originals obtained when opening the Public Provident Fund account.
Online applications have different processes for each bank, but the core documents and application submission stay the same.
Key Features and Benefits
The Public Provident Fund (PPF) is a popular investment scheme in India, known for its safety, tax benefits, and long-term wealth creation potential. The following are some significant aspects of the Public Provident Fund:
- Government Backing: The PPF is a government-backed savings scheme introduced by the National Savings Institute of the Ministry of Finance, Government of India. This backing ensures the safety and security of the invested funds.
- Long-term Investment: PPF is designed as a long-term investment option, with a maturity period of 15 years. This makes it suitable for individuals looking to build a corpus for their retirement or other long-term financial goals.
- Fixed Interest Rate: The government sets the interest rate on PPF, which is subject to periodic adjustment. The return rate is often greater than that of regular savings accounts, making it an appealing choice for conservative investors.
- Tax Benefits: Investments made in PPF are eligible for tax deductions under Section 80C of the Income Tax Act, up to a specified limit. Additionally, the interest earned and the maturity amount are tax-free, making it a tax-efficient investment avenue.
- Minimum and Maximum Investment: The minimum amount required to open a PPF account is nominal, making it accessible to a wide range of investors. There is also a maximum limit on the amount that can be invested in a financial year, as per the rules set by the government.
- Flexible Contribution Frequency: Investors have the flexibility to contribute to their accounts as per their financial capability, either in lump sums or through regular contributions. However, the total contributions in a financial year should not exceed the prescribed limit.
- Partial Withdrawals and Loan Facility: While the funds are locked in for 15 years, partial withdrawals are allowed from the 7th financial year onwards, subject to certain conditions. Additionally, account holders can avail of loans against their PPF balances from the 3rd to 6th financial year.
- Transferability: PPF accounts are transferable from one authorized bank or post office to another, as per the investor’s convenience or requirements.
- Nomination Facility: Investors can nominate one or more individuals to receive the proceeds of their PPF account in the event of their demise, ensuring smooth transmission of wealth to the nominee(s).
- Extension of Maturity: After the initial 15-year maturity period, investors have the option to extend their Public Provident Fund accounts in blocks of 5 years indefinitely, providing continued tax benefits and a secure avenue for wealth accumulation.
These key features and benefits make the Public Provident Fund a popular choice among Indian investors seeking a safe, tax-efficient, and long-term investment option for wealth creation and financial planning.
How to Create a Public Provident Fund (PPF) Account Online
To open a PPF account online, complete these steps:
Step 1. Loin to your bank account using Internet banking or mobile banking platform.
Step 2. Then choose the option to ‘Open a PPF Account.’
Step 3. Select ‘Self Account’ if you’re opening the account for yourself, or ‘Minor Account’ if it’s for a minor.
Step 4. Complete the application form with all of the required information.
Step 5. Enter the total amount you wish to deposit in the account per financial year.
Step 6. Submit the application and you’ll receive an OTP on your registered mobile number; enter it in the provided field.
Note – Your PPF account will be created instantly! You’ll see your PPF account number on the screen, and you’ll also receive an email confirming all the details.”
How to Transfer PPF Account to Other Bank
If you’re looking to transfer your PPF account from one bank to another or from a post office to a bank, follow these steps:
Step 1. Visit your local bank branch or post office with your PPF passbook.
Step 2. Fill out a transfer application form provided by your home branch, ensuring you include the full address of the new bank branch or post office.
Step 3. Submit the transfer application form to your current bank or post office branch. Make sure to collect the transfer request receipt for reference.
Step 4. Your current branch will initiate the transfer process by sending the following documents to the new branch.
- – Original application form for creating the PPF account
- – Nomination form
- – Certified copy of the PPF account
- – Current PPF passbook
- – Demand draft or cheque for the unpaid balance
- – Signature samples
Step 5. You’ll receive a notification once the new bank or post office branch receives your documents. If there are any changes, you’ll need to fill out a new Public Provident Fund account opening form and nomination at the new branch.
Step 6. Complete the KYC process at the new branch and provide a copy of your PAN card, along with personal identity and address documents.
Step 7. The transfer process may take up to a month to complete, whether transferring from one bank to another or from a bank to a post office.
How to Transfer a PPF Account From One Branch To Another Of Same Bank?
To initiate the process, simply submit an application form to your current branch requesting a change of branch if you need to relocate to a new city or region while retaining the same account. The process will be completed within seven working days.
Best Bank For Opening PPF Account
When considering the best banks in India to open a Public Provident Fund (PPF) account, several factors come into play, including interest rates, convenience, customer service, and additional features. Here’s a list of some top banks in India known for their PPF account services, along with a brief elaboration on each:
- State Bank of India (SBI):
– SBI is one of the largest public sector banks in India, offering competitive interest rates on PPF accounts.
– With a vast network of branches and ATMs across the country, SBI provides convenient access to PPF services for account holders.
– SBI’s online banking platform facilitates easy management of PPF accounts, including online transfers and account monitoring. - ICICI Bank:
– ICICI Bank is a leading private sector bank in India, known for its innovative banking solutions and customer service.
– The bank offers attractive interest rates on PPF accounts and provides a seamless online account opening process for customers.
– ICICI Bank’s wide branch network and robust online banking services make it a convenient option for PPF investors. - HDFC Bank:
– HDFC Bank is another prominent private sector bank offering PPF account services to customers.
– The bank provides competitive interest rates on PPF deposits and offers a user-friendly online banking platform for account management.
– HDFC Bank’s strong customer support and extensive branch network add to the convenience of opening and managing PPF accounts. - Axis Bank:
– Axis Bank is known for its customer-centric approach and efficient banking services.
– The bank offers competitive interest rates on PPF deposits and provides a hassle-free account opening process for customers.
– Axis Bank’s digital banking solutions and personalized customer service make it a preferred choice for PPF investors. - Bank of Baroda (BOB):
– Bank of Baroda is a trusted public sector bank in India, offering reliable PPF account services to customers.
– The bank provides competitive interest rates on PPF deposits and ensures a smooth account opening process at its branches.
– Bank of Baroda’s extensive branch network and customer-friendly approach make it a popular choice for PPF investors. - Punjab National Bank (PNB):
– PNB is one of the oldest and largest public sector banks in India, known for its robust banking infrastructure and customer service.
– The bank offers competitive interest rates on PPF deposits and provides convenient account opening facilities at its branches.
– PNB’s wide reach and commitment to customer satisfaction make it a reliable option for PPF account holders.
These are some of the top banks in India known for offering PPF account services with competitive interest rates, convenience, and reliable customer support. However, it’s essential to compare the offerings of different banks and choose the one that best suits your preferences and requirements for opening a PPF account.
Can Minor Open PPF Account
A PPF account for minors is one opened by a parent for their child. In such cases, the adult manages both the PPF account for minors and their account. However, the parent or guardian is solely responsible for handling the minor’s PPF account until the child reaches 18 years of age. Additionally, only natural or legal guardians are eligible to open a PPF account for a minor, and the scheme applies only to Indian citizens.
The parent or guardian can contribute up to ₹1.5 lakh per year to their child’s PPF account.. It’s important to understand that the amount deposited in both the minor’s and the parent’s accounts are combined and subject to a total limit of ₹1.5 lakh. To simplify, this means that the ₹1.5 lakh limit is divided between the parent’s and child’s accounts.
Check Public Provident Fund Balance
offline –
To check your PPF balance offline, simply visit your bank branch. Bring along your PPF passbook issued by the bank. Upon arrival, update your passbook at the bank counter to view your balance.
Online-
Utilizing a bank’s online services is the most convenient method to check one’s account balance. These online services are accessible 24/7 and have streamlined the process of checking PPF account balances to enhance efficiency.
However, it’s important to note that the online balance checking service is only available to those who have opened their PPF accounts at a bank. Additionally, individuals must link their existing savings account with the bank to their PPF account to access the online balance checking facility.
The process to check the account balance online is as follows:
- Ensure that Internet banking facilities for the linked bank account are activated.
2. Log in to the PPF account portal of the respective bank using the provided username and password.
3. Upon logging in, access the details related to both the PPF account and savings accounts.
4. Select the PPF account tab to easily check the account balance.
Users can also view up to 10 of their most recent PPF account transactions online. They may also obtain information about their inactive, matured, closed, and old PPF accounts with the same bank using the same online account.
How to Deposit in Public Provident Fund
You have the option to make online deposits through either a funds transfer (if both your savings and PPF accounts are held at the same bank) or a third-party transfer (if the accounts are held at different banks).
To initiate an online deposit, you must first add your PPF account as a beneficiary by logging into your NetBanking account. Once your PPF account is added as a beneficiary, you can effortlessly transfer funds via NetBanking or MobileBanking.
If you prefer automation, you can set up standing instructions with your bank, allowing your PPF investments to be credited automatically.
You can conveniently access your account statements online to review balances in your PPF account.
How to invest in PPF Offline
You have several options to deposit funds into your PPF account, including cash, cheque, or demand draft. To make a deposit, you need to fill out a PPF deposit challan or Form B. The deposit slip consists of a main section and two counterfoils – one for an agent and one for you to keep as a receipt.
Fill out the form and the counterfoils accordingly (if you are investing directly, disregard the agent copy). You’ll need to provide your name, address, PPF account number, the amount you are investing, and details of the payment method (cheque or cash). The teller will then stamp the paperwork and provide you with a counterfoil.
Ensure that your passbook is updated if you have one. If you are depositing by cheque, your passbook will be updated after the cheque is cleared. When you make a cash deposit, the bank will instantly update your passbook.
FAQs
Can I open 2 PPF accounts?
According to the current guidelines, each person can only have one PPF account. Each person is only allowed to have one PPF account.
Can I deposit 2 times a month in PPF?
According to new rules, there are no restrictions on the number of deposits in a month.
What is the new interest rate for PPF in 2024?
The current PPF Interest Rate is 7.1%
Can I open a public provident fund account online without visiting a branch or post office?
Yes, you can open a PPF account without visiting a branch, from online mode.
Is it safe to open an online account?
Yes, it is safe and the best option for opening a PPF account.
Who can not open a Public Provident Fund account?
NRIs and Hindu Undivided Families do not open a PPF account.
Which is the best month to open a PPF account?
April is the best month for opening.